Pound Falls As U.K. Construction Growth Eases More Than Forecast

7/4/2017 6:27 AM ET

The British pound weakened against most major currencies in the European session on Tuesday, after data showed that the British construction sector growth eased at a faster-than-expected pace in June, after reaching to a 17-month high in May.

Data from IHS Markit and Chartered Institute of Procurement & Supply showed that the seasonally adjusted construction Purchasing Managers' Index, or PMI, dropped to 54.8 in June from 56.0 in May. Economists had expected the index to fall to 55.0.

Meanwhile, the European share markets traded lower amid fresh tensions on the Korean peninsula after North Korea launched another ballistic missile in the direction of Japan, prompting U.S. President Donald Trump to declare it is "hard to believe South Korea and Japan will put up with this much longer".

In the Asian trading toady, the pound held steady against its major rivals.

In the European trading, the pound fell to a 6-day low of 1.2915 against the U.S. dollar and a 4-day low of 0.8790 against the euro, from early highs of 1.2959 and 0.8764, respectively. If the pound extends its downtrend, it is likely to find support around 1.26 against the greenback and 0.89 against the euro.

Against the Swiss franc, the pound edged down to 1.2452 from early highs of 1.2479. The pound is likely to find support around the 1.22 region.

Meanwhile, the pound rose to 146.61 against the yen, from an early low of 145.98. On the upside, 148.00 is seen as the next resistance level for the pound.

Looking ahead, Canada Markit's manufacturing PMI for June is slated for release in the New York session.